High costs wipe out rising Scottish farm income

Scottish Rural Affairs secretary Richard Lochhead has said the Scottish government will redouble its efforts to reduce input costs on Scottish farms in order to help the food and farming industry benefit from rising incomes.

The news came as the Scottish government announced that food output from farms across Scotland rose by 13.9% or £338m last year, but that much of the increase was wiped out by rising costs.

Costs – including animal feed, fertiliser and fuel – rose by around 13% (£227m) during 2011 to £2,400m, as a result of commodity volatility.

The figures revealed in the Farm Business Income report also showed that the smallest margins were made by specialist sheep farms in Less Favoured Areas (LFAs), which had an average return of £29,235. Output from the sheep sector rose 9.6% to £220m, double the 2005 figure.

Beef farmers in LFAs made an average of £32,528. There was a £61m increase in the value of beef sold in 2011, which was valued at £568m.

Lochhead has also commented that independence would strengthen the competitiveness of the Scottish farming industry, despite criticism from the Scottish Tories, who claim that Scotland would have to reapply for EU member status, which may cause problems for single farm payments.

In 2011, around £634m was paid to Scotland’s farms in public subsidies.